Which development strategy is defined as domestic production intended to substitute imports?

• A. Export Substituting Industrialization
• B. Import Substituting Industrialization (ISI)
• C. Diversification
• D. Deindustrialization

Answer: (B)

Import Substituting Industrialization is a development strategy that aims to reduce a country’s reliance on imported manufactured goods by building up domestic production. It often relies on protective tariffs, import quotas, and government support to nurture infant industries so they can grow and replace imports with goods produced at home. This approach was widely used in Mexico and other Latin American countries during the mid-20th century as a way to spur industrial growth and lessen vulnerability to external shocks. In contrast, exporting-focused strategies promote growth through exports, diversification means broadening into more sectors without a specific import focus, and deindustrialization refers to a decline in manufacturing.